Elijah Ntongai, an editor at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan, African, and global trends.

The Kenya Revenue Authority (KRA) has announced a major overhaul of the Pay As You Earn (PAYE) tax return filing process.

In a public notice dated June 23, 2025, KRA revealed that the changes were informed by feedback from taxpayers and are intended to enhance user experience for employers in the public, private, and not-for-profit sectors.

According to the notice, the streamlined PAYE return system allows employers to file tax returns relevant to specific employee categories more efficiently.

KRA noted that the new process is connected with key government platforms, including the Integrated Financial Management Information System (IFMIS), Central Bank of Kenya (CBK), and human resource information systems, through API connections.

This ensures a seamless process for filing and paying PAYE, the Affordable Housing Levy, NITA Levy, and other statutory deductions.

"The simplified PAYE return aims to improve the user experience for all including the public, not-for-profit and private sectors. The simplified process facilitates employers to file returns relevant to their categories of employees. It also integrates with government human resource information system, IFMIS and CBK through API integration for seamless filing and payment of PAYE, Affordable Housing Levy, NITA Levy and other labour related deductions and contributions." read the notice in part.

KRA stated that from 1st July 2025, all employers will be required to use the new simplified Excel-based PAYE return forms.

In order to file through the simplified PAYE filing process, employers must download the specially programmed Simplified Excel PAYE Return from the KRA website, as well as the sample CSV files displaying how payroll data should be correctly formatted. These tools help employers prepare compliant and correct returns.

On filling out the Excel file with payroll details, including remuneration of employees, PAYE, Affordable Housing Levy, NITA Levy, and other statutory deductions, the completed file is uploaded into the iTax system for submission.

KRA is also enhancing its digital systems to target businesses that are not paying Value Added Tax (VAT).

In other news, KRA has been tasked with raising KSh 3.32 trillion in revenue to support the KSh 4.3 trillion national budget for the 2025/26 financial year.

The authority expects to collect KSh 1.28 trillion from income tax, which includes PAYE, KSh 771.7 billion from VAT, KSh 162.9 billion from import duties, KSh 335.5 billion from excise duties, KSh 69.9 billion from investment income, and KSh 132.5 billion from other revenue streams.

However, even with these projected collections and supplementary appropriations, the total revenue is still expected to fall short of fully financing the national budget.

Source: TUKO.co.ke